Key Voluntary Market Trends and Tactics

keyartAn Eastbridge study finds that sales for individual voluntary products are flat while group sales are up 10%. The top two selling lines of business are again term life and dental, but accident rather than short-term disability comes in third. Although short-term disability continues to enjoy a decent share of the product mix at 13%, it saw only modest growth of 2% last year. Critical illness products saw a 25% growth in sales while long-term care sales fell by nearly 40%. As for distribution, the benefit broker segment still takes the largest share of voluntary/worksite sales (at 60%) while the career agent segment had the second highest, but decreasing share. The top 15 companies in the voluntary/worksite market in this year’s study accounted for about 78% of total voluntary sales in 2015, with Aflac, MetLife, Unum and Colonial Life leading the market. For more information, visit

Many Americans Fail the Employee Benefits IQ Quiz
While 80% of working Americans say they understand their benefits very well, only 49% actually do, according to a survey by The Guardian. Responding to a 10-question quiz on benefit coverage and terminology, the average score was 72 (letter grade C). Those who got a failing grade were 20% of working Americans,10% of early Boomers, and 25% of Millennials. One in four employees says that choosing benefits is more of a guessing game than an educated decision. Employees are better informed about medical insurance compared to other supplemental health benefits. Fifty-seven percent don’t realize that a critical illness insurance payment can be applied to a wide range of out-of-pocket costs. Forty-six percent don’t know that a disability insurance elimination period is the time from when their claim is approved until they begin receiving disability income payments. Many workers also encounter problems with commonly used insurance terms, such as “guaranteed issue” and “portability.” For more information, visit


Department of Insurance ACA Compliance Grant
The Centers for Medicare and Medicaid Services awarded a $1.84 million grant to the California Department of Insurance to enhance enforcement of key market reforms under the Affordable Care Act. The grant will help the department make sure that insurers are in compliance with the Affordable Care Act. The department was awarded federal funds to do the following:

  • Enhance enforcement of non-discrimination standards in the designs of health insurer plans, networks, and formularies.
  • Enhance enforcement of no-cost coverage for preventive care services under Section 2713 of the Public Health Service Act.
  • Enhance review of Medical Loss Ratio reports.
  • Enhance enforcement processes of parity in coverage of mental health and substance use disorder benefits under the Mental Health Parity and Addiction Equity Act of 2008.

Kaiser Permanente Earns Top Rating in California
For the ninth consecutive year, Kaiser Permanente is the only health plan in California to earn a four-star rating — the highest possible — for clinical effectiveness in the annual Healthcare Quality Report Card from California’s Office of the Patient Advocate. The 2016-2017 report card gives California consumers side-by-side comparisons of the largest health plans in the state. It ranks the health plans on national standard-of-care measures that involve treatment and prevention of a range of conditions that have significant implications for personal health. Ten of the states largest HMOs are compared in the report card. Kaiser Permanente was the only health plan with the top rating possible for clinical performance measures. Kaiser Permanente in both Northern and Southern California got three stars in the Patients rate their experience category, which measures members satisfaction with their care and service. In addition, Kaiser Permanente Southern California has maintained the four star-rating in the HMO uses treatments proven to be effective category for nine years. For the fourth year in a row, Covered California has given Kaiser Permanente its highest rating – five stars — for quality and service. Covered California’s ratings reflect exchange enrollees satisfaction with their health plan, as well as their experiences with their doctors, hospitals and other health care providers. For the sixth consecutive year, Kaiser Permanente’s Medicare plan in California earned five stars, the highest rating in the state for quality and service for 2017, from the Centers for Medicare & Medicaid Services.


Less Than Half of Americans Understand How Their Plan Works
A survey by PolicyGenius reveals a gap between consumers perceived and actual knowledge of deductibles, co-pays, coinsurance, and out-of-pocket maximums. There is a 22% gap between women’s self-rated confidence in their knowledge of insurance terms and their actual comprehension, compared to a 29% gap for men. Millennials ( 25-34) have the lowest comprehension of health insurance terms and are least aware of their lack of understanding, showing a 29% gap between their confidence and comprehension. The least understood health insurance term was coinsurance with only 22% of consumers who understood it, compared to 42% who understood out-of-pocket maximum, 50% who understood deductibles, and 52% who understood co-pays.

Jennifer Fitzgerald, CEO of PolicyGenius said, “Consumers will be hard-pressed to find the best policy for their money due to a decrease of insurers available on the ACA marketplaces this year and an average 10% increase in premiums…Americans will need to weigh competing priorities, understand the apples-to-apples difference between plans, and understand how decisions may impact their total out-of-pocket costs.”

Seventy percent are satisfied with their current plan. People who used their health insurance two to three times in the past year are 12% more likely to be satisfied than those who used it just once. Seventy-seven percent of Millennials are satisfied with their health insurance plan. There is no variation in plan satisfaction between those who have individual insurance versus employer-provided insurance. More than half of respondents aren’t very confident in their ability to choose the best health insurance plan for their needs.

Only one-third of women are very confident in their ability to choose the best health insurance plan for their needs. The two groups that showed the highest confidence are men at 58% and Millennials at 43%. The survey found higher confidence levels in men over women (12% difference) and younger versus older respondents (Millennials are most confident at 43%, 10% more than ages 45-55) in their ability to choose the best plan. PolicyGenius is launching its health insurance app to help consumers weigh benefit options and priorities by offering a transparent look at the trade-offs inherent in every health insurance plan. For more information, visit

Out-of-Pocket Costs Have Highest Impact on Customer Satisfaction With Obamacare Plans
A report by reveals that people are significantly happier with their health insurance plan if they have lower monthly premiums, fewer out-of-pocket costs for medical care and prescription drugs, and can use in-network doctors. eHealth customers who got advanced premium tax credits (also known as Obamacare subsidies) are almost twice as likely to be satisfied with their health plan (48% satisfied) as those who did not get a subsidy (only 25% satisfied). The highest swing in customer satisfaction was driven by out-of-pocket costs for medical care. People with little or no out-of-pocket costs for medical care are more than twice as likely to be satisfied with their health plan than those who had to pay out-of-pocket costs (51% satisfied versus 21% satisfied).

People without unexpected prescription drug costs are far more likely to be satisfied with their health plan than those who did have unexpected drug costs (41% satisfied versus 29% satisfied). People who had to go out-of-network to get medical care are less satisfied with their health plan. People who got in-network care are more likely to be satisfied than those who had to go out-of-network (38% satisfied versus 26% satisfied).

Sixty-two percent of eHealth customers did not use their health insurance plan past year; 8% only used their coverage for preventive care; and 30% used their coverage for treatment of an injury or illness. However, those who didn’t use their insurance only slightly happier with their coverage (38% satisfied) than those who used it for preventive care (35% satisfied) or to treat injuries or illnesses (36% satisfied).

Customers who used their health plan for maternity care are significantly less satisfied with their health coverage than are other customers. Only 19% of customers who needed maternity care in 2016 are happy with their Obamacare health plan. In addition, only 24% of customers who needed maternity care in 2016 are happy with their access to doctors, compared to 45% of all other customers who said they are satisfied with their access to doctors.

Thirty percent used their health coverage for non-preventive medical care in 2016. Among these, 89% had to make out-of-pocket payments in the form of deductibles, co-pays, coinsurance and/or out-of-network charges. The average amount spent out of pocket in 2016 was $2,786 for non-preventive medical care. Twenty-five percent of those who used their health coverage to treat a medical illness or injury (non-preventive care) used the emergency room; 26% needed care for a chronic illness; 10% needed mental health care; and 10% needed care for an unexpected illness. For more information, visit

Health Insurance Price Index Report for the 2016 Open Enrollment Period

Consumers without premium tax credits chose health insurance plans with monthly premiums averaging $321 for individuals and $833 for families in 2016, according to a study by eHealth. Highlights include the following:

  • Monthly premiums averaged $321 for individuals and $833 for families.
  • Annual deductibles averaged $4,358 for individuals and $7,983 for families.
  • The average individual Platinum plan ($498 per month) cost 58% more than the average Bronze plan ($315 per month)
  • 44% of individual and family plans were Bronze; 29% were Silver; 12% were Gold; 3% were Platinum; and 12% were catastrophic.
  • 40% of individual and family plans were HMOs; 38% were PPOs; 16% were EPOs; and 6% were POS plans.
  • Nearly 40% of eHealth shoppers were previously uninsured.

Prescription Drug Costs Are a Top Concern for Many Medicare Beneficiaries
The issue of prescription drug costs is a top concern for Medicare beneficiaries, according to a Walgreens survey. However, 34% aren’t reviewing their prescription drug plan before renewing, and 19% don’t have a good understanding of their plan. The survey also finds the following:

  • 22% look at just one component, checking, for example, to see if their medications are covered.
  • 21% believe falsely that all pharmacies charge the same copay.
  • 33% don’t know that they can switch pharmacies any time of year.
  • When choosing a pharmacy, 30% of Medicare beneficiaries say copay costs are the most important factor, followed by pharmacy location (18%) and the opportunity for one-stop shopping (18%).
  • The cost of health care remains a chief concern to respondents; prescription costs slightly outrank other costs as being of greatest concern (35%). Just below drug costs are expenses associated with assisted living (33%) or hospital and emergency room services (32%).
  • 12% have delayed filling a current prescription, and another 9% have skipped occasional doses to stretch medication supply.

According to Walgreens, when renewing Part D coverage, it is important to do the following:

  • Make sure your prescription drugs are covered.
  • Review the cost of premiums, deductibles, and copays.
  • Verify whether your plan has preferred pharmacies.

For more information, visit


Many Consumers Miss LTC Planning
A study by Lincoln Financial Groups finds that the majority of people who are 40 to 70 have not taken the necessary steps to prepare for a long-term care event. Only 45% of those with a financial advisor have discussed long-term care with their advisor, and few are aware of the wide range of solutions. Among those who have spoken with a financial advisor about long-term care, the most common resource discussed is long-term care insurance (82%). Retirement savings are the second most common resource (61%). Among the least discussed resources are hybrid products that combine long-term care benefits with a life insurance policy or annuity. Hybrid products are rapidly gaining traction in the market and outsell traditional long-term care insurance products, according to LIMRA. Only 28% of those surveyed own a financial product that can help address potential long-term care expenses. The top reasons for purchasing the product are to avoid depleting assets and for peace-of-mind, each cited by 92% of product owners followed by the desire to get the care one needs (86%).

Primary barriers for purchasing an LTC product are competing financial priorities and concerns over paying for something that may never be used – each reason cited by 57% of respondents. While some types of long-term care coverage products are use it or lose it, many hybrid products provide a benefit whether or not care is ever needed. Andrew Bucklee of Lincoln said, “As we head into Long-Term Care Awareness Month, its a perfect time for those who have not planned for potential care needs to begin conversations with their family and financial advisor. During these discussions, its critical that advisors help their clients identify their care preferences and other potential needs while ensuring they understand the differences among the many types of financial solutions available and the distinct advantages of each when building a tailored strategy that includes the right mix of solutions.” Respondents ranked these financial concerns in order:

  • Healthcare expenses (62%)
  • Retirement planning – having enough to live comfortably (59%)
  • Value of investments declining (58%)
  • Costs associated with nursing home or adult day care (54%)
  • The event of outliving their money (48%)

For more information, visit


The ACA Spurs Growth of Dental Plans
Dental benefit offerings have seen an uptick as the Affordable Care Act (ACA) has become more ingrained in the U.S. health care system, according to an A.M. Best report. Companies that filed an annual health statement with the National Association of Insurance Commissioners increased their dental net premiums written by 77% over the past decade. The largest annual rate of growth came in 2014, when net premiums written increased 14% year-over-year. Similarly, enrollment grew 53% for the same period, with a 19% year-over-year increase in 2014. Despite geographic and provider network challenges, dental business has given health insurers steady net operating gain profitability over the past decade, with a fairly substantial improvement in results since 2009. The consistent operating profitability has been supported by a loss ratio from 60% in 2008 to 64% in 2013. Dental writers benefit from the mostly consistent utilization of policyholders. They usually don’t experience large one-time shock claims that may be associated with more typical health lines of business, which keeps the loss ratio fairly manageable and predictable. As companies expand into individual dental markets where adverse selection is a potential risk, the products are modified to include longer waiting periods for major dental services and lower annual maximums.

The top 10 dental writers account for 62% of the market, with MetLife holding the dominant share at 17%. The individual dental market also is highly concentrated as the top 10 players account for 67% of the market, led by MCNA Insurance Company’s 30%. Individual dental benefits are relatively new, with interest emerging and premium growing rapidly over the past 10 years. Regardless of some provider network challenges and certain under-served geographic areas, the dental insurance industry is poised for growth as employees continue to value the benefit offering and more dental insurers participate in the ACA exchanges. Increasing competition, including numerous small carriers expanding their exchange offerings, may pressure operating results. But underwriting gains in each of the past five years are substantially higher than levels recorded in 2005-2009, according to A.M. Best. To get a copy of the report, visit


Virtual Retirement Coach
Principal Financial Group is offering My Virtual Coach, a web-based, interactive educational resource to help people plan and save for retirement. Nearly one-third of people who enroll through My Virtual Coach contribute 10% of their salary or more (only 7% of people contribute 10% or more using traditional enrollment methods). More than 30% elect automatic, annual contribution increases (compared to 5% when using traditional enrollment). Their deferrals average nearly 3% more than among those enrolling traditionally. To find out more, visit

Prescription Coverage Comparison Tool
When comparing 2017 health insurance plans at eHealth, consumers can enter their prescription drug regimen into a comparison tool of insurance plans in their area.

Benefits for Small Businesses
MetLife launched MetLife Simply Smart Bundles, which provide brokers and small business owners with employee benefits that enhance their ability to compete in their local markets. Designed for businesses with 10-99 employees, the Bundles product includes a combination of dental and vision insurance. There is also the opportunity to add on an employee-paid group legal plan. It’s the first time MetLife is making this benefit available to small businesses. For more information, visit

Health Exchange
In October, HealthSherpa opened a storefront in downtown Sacramento allowing people to meet with consumer advocates to enroll in health insurance. Agents also use HealthSherpa to enroll people in marketplace coverage. HealthSherpa’s agent base has grown 300%, increasing from 4,000 in 2015 to 13,000 in 2016.This allows even more channels for consumers to identify the best healthcare coverage that will fit their budgets and healthcare needs. For more information, visit

Permanent Life Insurance
Aflac expanded its group life portfolio to include a universal life plan with long-term care benefits and an enhanced group whole life plan. Brokers had asked Aflac for a full suite of permanent life products. The new insurance offerings help brokers serve as a one-stop resource for affordable voluntary benefits. Universal life is a comprehensive option with eight optional riders including living benefits for long-term care. For more information, visit

Life Insurance and Annuity Platform
Accenture updated the Accenture Life Insurance & Annuity Platform. It is designed to enhance productivity for underwriters and case managers through streamlined navigation and centralized information. The new workbench delivers one simple management tool and a view of policies for underwriters and case managers. For more information, visit